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Tata Buys Land Rover And Jaguar. Now It Has To "Nano" Them.

There is, of course, a certain historic irony to the ex-colony coming to the rescue of the imperial power?a href="http://news.bbc.co.uk/2/hi/business/7313380.stm">India’s fast-growing Tata Group buying the very British Land Rover and Jaguar. But wait—that’s already happened. The U.S. did that with Ford—and failed, at least with Jaguar. So Tata is buying the brands from Ford. Now it is up to yet another ex-colony to give new life to two venerable brands. And despite huge skepticism, especially in the British press, I think Tata is up to it.

The truth is, Tata Motors is proving to be a key innovator on the global scene with the Nano car. And if the parent Tata Group doesn’t

lose its courage, it can bring the same innovative spirit and talent to remaking Jaguar and Land Rover. Tata has promised the British unions and government that it will make no serious changes in management and production and it basically has to break that promise if it is to give new life to Jaguar and Land Rover.

With the $2,500 Nano, Tata reengineered not only the car itself but the assembly and sales model. The biggest innovation, in the end, was in the business model. Bypassing expensive, big dealerships by building the Nano so it can be assembled in village garages, is a brilliant innovation in distribution. Using reverse-auctions to cut the cost of parts is another smart innovation. So is modularity. The same kind of game-changing, disruptive innovation is needed for Jaguar and Land Rover.

It will be all-too-easy to shift engineering and, in the end, even manufacturing to lower-cost India from high-cost Britain. Tata needs to re-imagine the whole process of developing and producing high-cost autos, just as it did with low-cost cars. But it will need courage to do it.